Merger with Disney+ Hotstar to Create Streaming Giant
In a significant move to dominate the Indian streaming market, Reliance Industries Limited (RIL) is considering a major consolidation of its streaming services. According to recent reports, RIL plans to merge the content of Disney+ Hotstar into JioCinema, aiming to create India's largest and most powerful streaming platform.
This strategic move follows the recent deal between RIL and Walt Disney to merge Star India and Viacom18, resulting in a media giant valued at approximately $8.5 billion. The new entity will encompass over 100 TV channels and two prominent streaming services, but RIL is keen on streamlining operations by focusing on a single platform.
Current User Base and Content Offering
Disney+ Hotstar, currently one of India's top streaming services, boasts over 500 million downloads on the Google Play Store and had 333 million active users in the last quarter of 2023. However, it has faced a decline in paid subscribers, dropping from 61 million at its peak to 35.5 million as of June, largely due to the loss of rights to popular content such as the Indian Premier League (IPL) and HBO shows.
On the other hand, JioCinema, owned by Viacom18 (a joint venture of Network18 Group and Paramount Global), has over 100 million downloads and has been growing rapidly. JioCinema had an average of 225 million users each month, and its acquisition of the digital rights to the IPL has led to record-breaking viewership.
Enhanced Content and Features
The merger of Disney+ Hotstar and JioCinema would bring together an extensive library of content, including over 125,000 hours of entertainment, sports, and Hollywood content. This combined platform would feature significant sports rights, such as the IPL, and content from major studios like Disney, HBO, NBCUniversal, and Paramount Global.
JioCinema has already expanded its offerings through various partnerships. In May 2023, it secured agreements with Warner Bros. Discovery to carry HBO and Max original programming, and with NBCUniversal to add a Peacock hub featuring content from Universal Television, Universal Pictures, and other studios.
Regulatory Approvals and Market Impact
The proposed merger is awaiting approval from regulatory bodies such as the Competition Commission of India (CCI) and the National Company Law Tribunal (NCLT). To address concerns about market dominance, RIL is willing to shut down some TV channels in Hindi and regional markets.
The valuation of the combined entity is significant, with Viacom18 valued at Rs 33,000 crore and Star India at Rs 26,000 crore, according to reports by EY and BDO. This merger underscores the growing importance of digital businesses, which are commanding valuations twice as high as traditional television businesses due to their flexibility and broader scope in distribution and revenue generation.
Subscription and Pricing Strategy
In an effort to attract more subscribers, JioCinema has recently cut its premium subscription prices. The 'JioCinema Premium' subscription now starts at Rs 29 per month, offering ad-free streaming, support for up to 4K video quality, and offline viewing capabilities. A family plan is also available at Rs 89 per month, allowing simultaneous access on four screens.
Future Outlook
The integration of Disney+ Hotstar into JioCinema is part of RIL's broader strategy to strengthen its position in the competitive Indian streaming market. With the combined platform, JioCinema is poised to become a formidable competitor to global giants like YouTube, Netflix, and Amazon Prime Video.
As the video entertainment industry in India is projected to reach a valuation of $13 billion by 2028, with OTT platforms contributing significantly to this growth, JioCinema's expanded offerings and competitive pricing are set to make it a leading player in this burgeoning market.
